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Bank of Thailand Holds Talks with Gold Traders Association to Mitigate Currency Pressure

Strategic Insights

— 1 min read

The Bank of Thailand has taken swift action to address the impact of gold trading on the country's currency, following a significant appreciation of the baht. The currency has surged by over 7% since the start of the year, with a substantial current account surplus and rising global gold prices contributing to its strength. Pimpan Charoenkwan, assistant governor for the BOT's Financial Markets Group, has confirmed that a meeting with the Gold Traders Association was held to discuss ways to alleviate pressure on the currency. The association proposed a strategy to encourage more gold transactions in US dollars, while the central bank has urged gold shop operators to monitor trading in baht and prevent transactions linked to illegal activities.

Key Takeaways:

  • The Bank of Thailand has held talks with the Gold Traders Association to address the impact of gold trading on the currency, following a 7% appreciation of the baht since the start of the year.
  • The association proposed a strategy to encourage more gold transactions in US dollars to mitigate the currency's pressure.
  • The central bank has urged gold shop operators to step up their monitoring of gold trading in baht and ensure that no transactions are linked to illegal activities.
  • The Association and its members have been asked to prepare a formal proposal detailing further measures to help alleviate pressure on the currency.
  • The Bank of Thailand has emphasized the need for effective and targeted measures to address the issue.

Statistics:

  • The baht has surged by over 7% since the start of the year.
  • The current account surplus has significantly contributed to the baht's strength.
  • The global gold price increase has also played a role in the baht's appreciation.
  • The Bank of Thailand has received feedback from the Gold Traders Association and its members to prepare a formal proposal on further measures.

Sources:

  • Bank of Thailand

source: Pimpan Charoenkwan, assistant governor for the BOT's Financial Markets Group

  • Gold Traders Association

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